Total meat protein supplies were up 2.3% from the previous year for the week ending February 16th. While supplies have been higher than the previous year, retail prices have also risen which has reduced the amount consumers are willing to purchase. Producers have started responding to potential oversupply issues by reducing beef and pork production slightly, but broiler production remains well above last year's levels.

1. Sponsored by
Vol. 11, No. 34 / February 19, 2013
The first line of the weekly production table on Year/Year Change in Weekly Meat Protein Supplies
page 2 shows the combined supply of beef, pork, broiler 10.0%
Combined Output of Beef & Pork (carcass wt. ) + Broiler & Turkey (ready-to-cook), % change
and turkey meat that came to market last week. The num-
8.0%
ber is not completely exact since the broiler and turkey supplies
are reported with a one week lag but it is close. For the week end- 6.0%
ing February 16, total meat protein supplies were up 2.3% from a 4.0%
year ago. The six week moving average (which helps smooth 2.0%
out the week to week volatility) is currently hovering at around
3% ABOVE last year’s levels. While there is plenty of talk 0.0%
about demand problems in the meat complex, particularly for beef -2.0%
and pork, it would appear to us that we have a supply issue. And -4.0%
all the terminology about “weak demand” continues to miss the -6.0%
point, rather we prefer to talk about rising prices impacting the
quantity consumers/end users are willing to purchase. After all, -8.0%
we are trying to get US consumers to purchase more beef, pork -10.0%
and poultry meat than what they did last year while at the same 2010 2011 2012 2013
time charging them more money for it (see retail price chart to the
right). You can do that if demand for your product has gone up
but that is a difficult proposition as the economy is stuck in low Year/Year Change in Monthly Beef, Pork and Broiler Retail Prices
20.0%
gear and consumers face higher real taxes (social security tax is
up) and higher energy costs (gasoline prices are higher than in
2012). 15.0%
There was much speculation coming into this year that
10.0%
tighter meat protein supplies would force beef, pork and poultry
prices higher. Retailers and foodservice operators geared up for
the coming inflationary environment. Indeed, a portion of the 5.0%
meat supplies coming to market are bought forward as both retail-
ers and foodservice operators seek to hedge their exposure. Those 0.0%
high beef and pork prices in the retail case do not always reflect
the spot market for beef and pork, they also reflect the futures -5.0%
prices against which end users booked some of their needs. It was Beef Broiler Composite Pork
not long ago that live cattle futures for February were priced close -10.0%
to the mid 130s while April futures flirted with $140. Some beef 2010 2011 2012 2013
for Q1 2013 likely was priced off those record high levels and the
meat in the retail case and foodservice menus today reflects those
lofty prices. The problem is that as retailers and foodservice oper- broiler production has been on average a whopping 6% over year
ators raise prices, the consumers will demand less of the product ago levels.
offered to them. This is fine as long as supplies are indeed lim- It appears that packers are finally responding and gear-
ited. However, when retailers are doing one thing (rising prices) ing up for a slowdown in production. Steer and heifer slaughter
but packers are doing another (producing more), a backlog of prod- last week was estimated at 461,000 head, down 4.4% from year
uct develops which requires significantly lower prices to clear the ago levels. Pork slaughter is expected to hover near year ago lev-
market. We do not have the retail prices for beef, pork and chick- els and with lighter hogs coming to market, pork supplies also
en for January (they will be released Feb 21) but it is quite likely should stay in check. The big wild card at this point is broiler pro-
prices will be higher than a year ago. Beef output in the last six duction, which has shown a dramatic increase from last year, due
weeks has been on average 2% higher than a year ago, pork out- to both more birds and heavier birds coming to market.
put has been on average unchanged compared to last year while
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2. Page 2
Sponsored by
Vol. 11, No. 34 / February 19, 2013
PRODUCTION & PRICE SUMMARY Week Ending 2/16/2013
Current Y/Y %
Item Units Week Last Week Pct. Change Last Year Pct. Change YTD Change
16-Feb-13 9-Feb-13 18-Feb-12
Total Red Meat & Poultry mil lbs., cwe 1,725 1,705 1.19% 1,687 2.27% 10,911 0.2%
FI Slaughter Thou. Head 596 593 0.51% 610 -2.35% 4,105 -2.9%
C FI Cow Slaughter ** Thou. Head 123 126 -1.87% 128 -4.01% 627 -3.9%
A Avg. Live Weight Lbs. 1325 1330 -0.38% 1307 1.38% 1,329 1.8%
T Avg. Dressed Weight Lbs. 802 799 0.38% 788 1.78% 801 2.1%
T Beef Production Million Lbs. 476.7 472.8 0.82% 480.1 -0.71% 3,245 -2.0%
L Live Fed Steer Price $ per cwt 122.79 124.87 -1.67% 128.03 -4.09%
E Dressed Fed Steer Price $ per cwt 195.86 199.84 -1.99% 202.40 -3.23%
OKC Feeder Steer, 600-700 $ per cwt N/A 157.18 N/A 167.57 N/A
& Choice Beef Cutout $ per cwt 183.07 183.31 -0.13% 189.04 -3.16%
Hide/Offal $ per cwt, live wt 13.62 13.62 0.00% 12.99 4.85%
B Rib, Choice $ per cwt 272.44 269.24 1.19% 266.85 2.09%
E Round, Choice $ per cwt 157.57 159.14 -0.99% 166.65 -5.45%
E Chuck, Choice $ per cwt 159.12 158.68 0.28% 156.92 1.40%
F Trimmings, 50% $ per cwt 65.53 64.45 1.68% 99.84 -34.36%
Trimmings, 90% $ per cwt 213.20 212.56 0.30% 212.28 0.43%
FI Slaughter Thou. Head 2,145 2,139 0.28% 2,151 -0.29% 14,672 -2.5%
FI Sow Slaughter ** Thou. Head 55.3 57.3 -3.55% 56.9 -2.91% 275 -1.0%
H Avg. Dressed Weight Lbs. 207.0 208.0 -0.48% 209.0 -0.96% 208 -0.6%
O Pork Production Million Lbs. 444.6 443.9 0.16% 448.4 -0.85% 3,044 -3.0%
G Iowa-S. Minn. Direct Wtd. Avg. 83.22 87.56 -4.96% 84.98 -2.07%
S Natl. Base Carcass Price Wtd. Avg. 85.44 86.71 -1.46% 84.77 0.79%
Natl. Net Carcass Price Wtd. Avg. 88.02 89.35 -1.49% 87.16 0.99%
Pork Cutout 200 Lbs. 80.88 83.25 -2.85% 86.52 -6.52%
Hams $ per cwt 64.18 67.43 -4.82% 65.83 -2.51%
Loins $ per cwt 88.75 90.14 -1.54% 97.58 -9.05%
Bellies $ per cwt 128.70 133.26 -3.42% 123.38 4.31%
72CL Pork Trim $ per cwt 57.26 63.81 -10.26% 72.27 -20.77%
C Young Chicken Slaughter * Million Head 155.0 155.8 -0.48% 149.8 3.47% 901 1.3%
H Avg. Weight (Live) Lbs. 5.88 5.81 1.20% 5.81 1.20% 5.84 2.0%
I Chicken Production (RTC) Million Lbs. 692.8 687.8 0.72% 652.9 6.11% 3,998 4.7%
C Eggs Set Million 196.7 198.0 -0.67% 195.5 0.61% 1,180 1.5%
K Chicks Placed Million Head 162.4 162.2 0.13% 161.9 0.28% 977 0.9%
E 12-City Broiler Price Composite 100.96 100.27 0.69% 90.09 12.07%
N Georgia Dock Broiler Price 2.5-3 Lbs. 100.3 99.91 0.39% 90.58 10.73%
Northeast Breast, B/S $/cwt 139.29 138.29 0.72% 123.31 12.96%
Northeast Legs $/cwt 67.64 67.02 0.93% 72.65 -6.90%
T Young Turkey Slaughter * Million Head 4.500 4.021 11.91% 4.191 7.37% 24.833 0.7%
U Avg. Live Weight Lbs. 30.83 31.19 -1.15% 31.44 -1.94% 31.47 -0.3%
R Turkey Production (RTC) Million Lbs. 111.0 100.3 10.65% 105.4 5.35% 624 0.3%
K Eastern Region Hen Price 8-16 Lbs. 95.00 95.00 0.00% 100.90 -5.85%
G Corn, Omaha $ per Bushel 7.19 7.37 -2.44% 6.45 11.47%
R DDGs, Minnesota $ per Ton 258.50 258.50 0.00% 190.50 35.70%
A Wheat, Kansas City $ per Bushel 7.41 7.63 -2.88% 6.66 11.26%
I Soybeans, S. Iowa $ per Bushel 14.51 15.20 -4.54% 12.68 14.43%
N Soybn Meal, 48% Decatur $ per Ton 422.70 454.10 -6.91% 330.30 27.97%
* Chicken & turkey slaughter & production are 1 week earlier than the date at the top of this sheet.
** Cow and sow slaughter reflect levels from two weeks ago due to reporting lag.
The Daily Livestock Report is made possible with support from readers like you. If you enjoy reading this report and would like to
sustain it going forward, consider becoming a contributor by going to our website: www.DailyLivestockReport.com
Thank you for your support!